It seems that many of the better known Italian bike builders did alot of crazy designs on their TT and pursuit bikes. They took some real design chances with them as compared to there more sedate and normal looking road bike designs.

I've seen pictures from Colnago, Bottecchia, Basso, Bianchi, Pinarello and a few others that seemed just about as over-the-top as the Cinelli pictured above. The Colnago bike inspired by Ferrari comes to mind -

I looked up the wikipedia page on pursuit bikes and I just don't understand... I suppose I need to see a race. Maybe I'm just too casual or traditional a rider at this point.

You need to ride a pursuit race to be fully able to appreciate it. Paired down to it's basics, it's a short, very intense time trial, on the track, with only two opponents (or teams of opponents). A traditional time trial has little appeal as a spectator sport to outsiders and a pursuit fares only slightly better because you can see the relative position of the opponents. Due to the short duration, margins of victory are often incredibly small, so manufacturers are constantly pushing the envelope with radical designs, to gain even a small advantage.

The subject bicycle is a further development of the Cinelli Laser. The most radical change is not the most evident. It's the extension of the down tube, in front of and below the BB shell, to create a fairing for the leading edge of the rear wheel. It would have been illegal without the inclusion of the vestigial stay below the traditional chainstay.

I worked on a kilo bike for Rory O'reilly in 1987 or so. It didn't have fancy paint but it did have a lot of features that made it unusually light. It had a conical Turcite head set (all plastic, no metal at all), bullseye cranks, segmented fork, aero section handlebar etc. I will try to find some photos.